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  • Writer's pictureAnthony Lawson


Merchant fees are similar to a cell phone bill; whether you use your phone or not, you can expect a bill to come every month as you're paying for access to your provider's cellular network. At the end of each month, just like your phone bill, a merchant’s fees are calculated and automatically debited from an established account on file. If, for whatever reason, the debit is not successfully pulled from the account, an ACH Reject occurs, but even worse, you're charged an ACH Reject Fee.

In most instances ACH rejects are quickly recognized and resolved, but in the “Tale of the Avoidable Rejects” recognizing the rejects was unfortunately only half the battle.

This story starts with a small business that didn’t process regular volume each month. In fact, they often had no monthly processing volume at all. They were just getting started and establishing their customer base, so they wanted to keep the merchant account open and available for a potential sale. This isn't uncommon for a new business, but remember, even if you don’t process any payments during the month, your open account charges for access in the form of a monthly service fee. When the merchant opened their new account, they linked a checking account they intended to fund with their incoming sales. But when they had no sales volume in their first month, there was unfortunately nothing to cover the monthly service fee. We notified the merchant of what happened. We felt we had a productive conversation about what they could expect moving forward, and how they could avoid these circumstances in the future. But soon this became a monthly occurrence. We continued to reach out, sometimes on a weekly basis. We made banking changes, we suggested suspending their account (and charges) until they had a sale, and even mentioned "pay as you go" styled providers that would be cheaper based on their needs. However, they were not interested in any of our recommendations, even as their ACH rejects piled on.

A while later, the merchant emailed asking about a deposit made on their account. They had their first sale! However, their excitement quickly wore off after realizing the full amount of the sale was not deposited into their account. After a brief discussion they understood that our processing bank was entitled to the balance owed for monthly fees they were previously unable to pay. What they didn't realize, however, was that ACH reject fees they accrued were also deducted. Unfortunately we had to remind them ACH reject fees are charged per instance. What started out as a simple $10 monthly service fee ballooned to a few hundred dollars. Had the merchant ensured funds were available at the end of the month they could have avoided extra fees. It is important to note, however, an ACH reject can strike at anytime - an unexpected chargeback or refund, providing incorrect account information, or issues related to your bank account security settings. This led us to understand the importance of keeping accounts separate. Whenever you open an account with us, you have the option of linking multiple bank accounts.

This is a convenient way of keeping track of your sales and expenses because no one wants to get hit with fees they can avoid!


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